U.S. natgas hits 13-year high on soaring LNG exports, higher demand

    May 24 (Reuters) - U.S. natural gas futures edged up about 1% on Tuesday, closing at a 13-year high, as
gas volumes flowing to U.S. liquefied natural gas (LNG) export plants jumped to the most in seven weeks on
raised forecasts for demand next week.
    U.S. front-month gas futures for June delivery rose 5.2 cents, or 0.6%, to settle at $8.796 per
million British thermal units (mmBtu) on Tuesday, a day after they soared 8%. It was their highest close since
August 2008.
    With the June contract expiring this week, analysts at energy advisory EBW Analytics said in note that
"Amplified volatility remains likely ahead of options expiration and final settlement (Wednesday) and
Thursday." The 8% rise on Monday established "a bullish technical outlook suggesting natural gas could soon
clear $9."
    U.S. gas futures were up about 135% year to date, as soaring global prices fed strong demand for U.S. LNG
exports, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow might cut of gas supplies
to Europe.
    Still, while U.S. futures have soared about 30% over the past month, European gas prices slid
about 8% as Russia kept sending supplies via pipeline while LNG vessels delivered cargoes.
    Gas has been trading around $27 per mmBtu in Europe and $22 in Asia.
    U.S. futures lag far behind global prices because the United States is the world's top producer, with all
the gas it needs for domestic use while capacity constraints inhibit LNG exports.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 95.0 billion cubic
feet per day (bcfd) so far in May from 94.5 bcfd in April, off the monthly record of 96.1 bcfd in November
2021.
    Refinitiv projected average U.S. gas demand, including exports, would ease from 89.1 bcfd this week to
88.5 bcfd next week. The forecast for this week was lower than the Refinitiv forecast on Monday, while its
forecast for next week was higher.
    The average amount of gas flowing to U.S. LNG export plants rose to 12.4 bcfd so far in May from 12.2 bcfd
in April. It hit a monthly record of 12.9 bcfd in March. The United States can turn about 13.2 bcfd of gas
into LNG.
    On a daily basis, LNG feedgas was on track to hit a seven-week high of 13.3 bcfd on Monday. The export
facilities can pull in a little more gas than they can turn into LNG because they use some of the fuel to run
plant operations.
    Since the United States cannot produce much more LNG soon, it has worked with allies to divert exports
from elsewhere to Europe to help break the region's dependence on Russian gas.
    Russia exported around 7.4 bcfd of gas to Europe on Monday, the same as Sunday, on the three mainlines
into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the
Russia-Ukraine-Slovakia-Czech Republic-Germany route. That was down sharply from an average of 11.9 bcfd in
May 2021.
    Gas stockpiles in Northwest Europe - Belgium, France, Germany and the Netherlands - were
about 11% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year
norm in mid-March, according to Refinitiv. Storage was currently about 40% of full capacity.
    U.S. inventories, meanwhile, were around 15% below their five-year norm. European futures on
Monday fell to their lowest since Feb. 21, three days before the invasion.

                                              Week ended     Week ended     Year ago   Five-year
                                                May 20         May 13        May 20     average
                                              (Forecast)      (Actual)                   May 20
 U.S. weekly natgas storage change (bcf):         +95            +89          +109        +97
 U.S. total natgas in storage (bcf):             1,827          1,732        2,199       2,139
 U.S. total storage versus 5-year average       -14.6%         -15.2%


 Global Gas Benchmark Futures ($ per mmBtu)   Current Day     Prior Day    This Month  Prior Year   Five Year
                                                                           Last Year    Average      Average
                                                                                          2021     (2017-2021)
 Henry Hub                                       8.90           8.74          2.96        3.73        2.89
 Title Transfer Facility (TTF)                   26.86          26.31         8.88       16.04        7.49
 Japan Korea Marker (JKM)                        22.60          21.83         9.65       18.00        8.95


 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
 Two-Week Total Forecast                      Current Day     Prior Day    Prior Year   10-Year      30-Year
                                                                                          Norm        Norm
 U.S. GFS HDDs                                    27             31            34          31          36
 U.S. GFS CDDs                                    124            119           90          98          112
 U.S. GFS TDDs                                    151            150          124         129          148

 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
                                              Prior Week    Current Week   Next Week   This Week    Five-Year
                                                                                       Last Year   Average For
                                                                                                      Month
 U.S. Supply (bcfd)
 U.S. Lower 48 Dry Production                    95.1           95.4          95.8        92.5        83.9
 U.S. Imports from Canada                         7.6            7.6          7.8         7.3          7.6
 U.S. LNG Imports                                 0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                               102.7          103.1        103.6        99.8        92.6

 U.S. Demand (bcfd)
 U.S. Exports to Canada                           2.8            2.6          2.7         2.1          2.1
 U.S. Exports to Mexico                           6.1            6.1          6.1         6.2          4.8
 U.S. LNG Exports                                12.2           13.2          12.9        10.5         5.1
 U.S. Commercial                                  5.0            5.1          4.6         5.0          5.6
 U.S. Residential                                 4.8            4.9          4.1         4.8          6.7
 U.S. Power Plant                                31.4           29.6          30.7        27.6        26.0
 U.S. Industrial                                 20.7           20.9          20.7        21.4        20.9
 U.S. Plant Fuel                                  4.7            4.7          4.7         4.7          4.6
 U.S. Pipe Distribution                           1.8            1.8          1.8         1.8          1.8
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          68.5           67.2          66.8        65.4        65.7
 Total U.S. Demand                               89.6           89.1          88.5        84.2        77.7


 U.S. weekly power generation percent by fuel - EIA
                                              Week ended     Week ended    Week ended  Week ended  Week ended
                                                May 27         May 20        May 13      May 6       Apr 29
 Wind                                             11             12            15          13          16
 Solar                                             4              4            4           4            4
 Hydro                                             7              7            7           7            7
 Other                                             2              2            2           2            2
 Petroleum                                         0              0            0           0            0
 Natural Gas                                      36             37            34          36          33
 Coal                                             20             20            18          19          19
 Nuclear                                          20             19            19          20          19


 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
 Hub                                         Current Day    Prior Day
 Henry Hub 8.16           7.97
 Transco Z6 New York 7.28           7.92
 PG&E Citygate 9.59           9.55
 Dominion South 7.27           7.43
 Chicago Citygate 8.02           7.80
 Algonquin Citygate 7.82           8.65
 SoCal Citygate 8.71           7.78
 Waha Hub 7.56           7.25
 AECO 5.17           4.61

 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
 Hub                                         Current Day
 New England 73.50         120.50
 PJM West 77.50         116.75
 Ercot North 66.25          76.00
 Mid C 88.50          25.00
 Palo Verde 51.75          41.75
 SP-15 78.00          43.50

 (Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)



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